There are many large businesses that subtly encourage their employees to own company stock inside their retirement accounts. This is a big mistake in my opinion. In practical effect you are doubling down on the future success of your employer. First, your income depends on a continuation of your job. Second, your retirement depends – at least in part – on the strategic decisions of upper management. Bad decisions by management can cost you your job and cause your stock to tank. Folks working at Wall Street’s “too big to fail” banks have learned this lesson the hard way

I wrote recently that I am trying to be more active and vigilant in managing our retirement investment holdings. In particular, I want to be sure that (a) there is a reason that we own each of the particular investments in our portfolio and (b) that I have targets for selling if necessary. Part of the vigilance is monitoring the performance of our portfolio in comparison to overall market conditions. If and when the market tanks, I don’t want our portfolio to suffer an identical fate.

For me, the last four years of economic turmoil have exposed many personal finance rules of thumb as rules of dumb. One of those may be the entrenched principal of “buy and hold” as a retirement investment strategy.

Will baby boomers cause our own investments to decline? According to one researcher, the answer is yes. There are so many of us that our collective retirement investing and spending plans are destined to negatively impact investment returns for everyone. How can this be?

We own stocks, stock mutual funds, and stock ETFs in our retirement portfolio. But the degree of equity exposure in our investments has gradually declined since late 2009. And, even though the market indices have rebounded, I am not inclined to change our exposure. I’m not the only one that feels that way. So why are Americans avoiding stocks?

So have you thought about what changes 2012 might bring to your retirement nest egg and income plan? I haven’t posted in a while but that doesn’t mean I haven’t been thinking about our economic future. Indeed, I have been contemplating what moves to make, if any, between now and the end of the year to plan for what lies beyond.

Lots of insurance companies sell variable annuities. Because the fees are high, they make a lot of money in the process. Baby boomers who are approaching retirement are a huge market for annuity companies. However, a lot of us have been (finally) educated about the negative aspects of variable annuities and have resisted buying. Then came the Guaranteed Lifetime Withdrawal Benefit (GLWB) rider. This changed the annuity landscape.

The Congressional not-so-super committee that was tasked with deficit reduction was a spectacular failure. I expected this and prepared our retirement portfolio for it. Yesterday as the market experienced yet another precipitous decline, the stop market order I placed on our U.S. stock index ETF (VTI) reached its trigger price and our shares were automatically sold as the market went down. At least this way we locked in some gains. I expect more bad news ahead and more declines. It is time to sit these out with less equity exposure.